Illinois General Assembly - Illinois Compiled Statutes

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810 ILCS 5/9-203

    (810 ILCS 5/9-203) (from Ch. 26, par. 9-203)
    (Text of Section before amendment by P.A. 103-1036)
    Sec. 9-203.

Attachment and enforceability of security interest; proceeds;
supporting obligations; formal requisites.

(a) Attachment.  A security interest attaches to collateral when it becomes
enforceable against the debtor with respect to the collateral, unless an
agreement
expressly postpones the time of attachment.

(b) Enforceability.  Except as otherwise provided in subsections (c)
through (i), a security interest is enforceable against the debtor and third
parties
with respect to the collateral only if:

(1) value has been given;
(2) the debtor has rights in the collateral or the

power to transfer rights in the collateral to a secured party; and

(3) one of the following conditions is met:
(A) the debtor has authenticated a security

agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;

(B) the collateral is not a certificated security

and is in the possession of the secured party under Section 9-313 pursuant to the debtor's security agreement;

(C) the collateral is a certificated security in

registered form and the security certificate has been delivered to the secured party under Section 8-301 pursuant to the debtor's security agreement; or

(D) the collateral is deposit accounts,

electronic chattel paper, investment property,  letter-of-credit rights, or electronic documents, and the secured party has control under Section 7-106, 9-104, 9-105, 9-106, or 9-107 pursuant to the debtor's security agreement.

(c) Other UCC provisions.  Subsection (b) is subject to Section 4-210 on
the security interest of a collecting bank, Section 5-118 on the security interest of a
letter-of-credit issuer or nominated person, Section 9-110 on a security interest
arising under Article 2 or 2A, and Section 9-206 on security interests in investment
property.

(d) When person becomes bound by another person's security
agreement.  A person becomes bound as debtor by a security agreement entered
into by another person if, by operation of law other than this Article or by contract:

(1) the security agreement becomes effective to

create a security interest in the person's property; or

(2) the person becomes generally obligated for the

obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.

(e) Effect of new debtor becoming bound.  If a new debtor becomes
bound as debtor by a security agreement entered into by another person:

(1) the agreement satisfies subsection (b)(3) with

respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and

(2) another agreement is not necessary to make a

security interest in the property enforceable.

(f) Proceeds and supporting obligations.  The attachment of a security
interest in collateral gives the secured party the rights to proceeds provided
by
Section 9-315 and is also attachment of a security interest in a supporting
obligation for the collateral.

(g) Lien securing right to payment.  The attachment of a security interest
in a right to payment or performance secured by a security interest or other
lien on
personal or real property is also attachment of a security interest in the
security
interest, mortgage, or other lien.

(h) Security entitlement carried in securities account.  The attachment
of a security interest in a securities account is also attachment of a security
interest
in the security entitlements carried in the securities account.

(i) Commodity contracts carried in commodity account.  The
attachment of a security interest in a commodity account is also attachment of
a
security interest in the commodity contracts carried in the commodity
account.

(Source: P.A. 95-895, eff. 1-1-09.)

    (Text of Section after amendment by P.A. 103-1036)
    Sec. 9-203. Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.

(a) Attachment. A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.

(b) Enforceability. Except as otherwise provided in subsections (c) through (i), a security interest is enforceable against the debtor and third parties with respect to the collateral only if:

(1) value has been given;
(2) the debtor has rights in the collateral or the

power to transfer rights in the collateral to a secured party; and

(3) one of the following conditions is met:
(A) the debtor has signed a security agreement

that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;

(B) the collateral is not a certificated security

and is in the possession of the secured party under Section 9-313 pursuant to the debtor's security agreement;

(C) the collateral is a certificated security in

registered form and the security certificate has been delivered to the secured party under Section 8-301 pursuant to the debtor's security agreement;

(D) the collateral is controllable accounts,

controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, electronic money, investment property, or letter-of-credit rights, and the secured party has control under Section 7-106, 9-104, 9-105A, 9-106, 9-107, or 9-107A pursuant to the debtor's security agreement; or

(E) the collateral is chattel paper and the

secured party has possession and control under Section 9-314A pursuant to the debtor's security agreement.

(c) Other UCC provisions. Subsection (b) is subject to Section 4-210 on the security interest of a collecting bank, Section 5-118 on the security interest of a letter-of-credit issuer or nominated person, Section 9-110 on a security interest arising under Article 2 or 2A, and Section 9-206 on security interests in investment property.

(d) When person becomes bound by another person's security agreement. A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this Article or by contract: